Zoning Payday Lenders Out of the City

New Orleans Payday lenders are weeds that crack the sidewalk. Payday lenders are “broken window” signposts advertising lower income neighborhoods and tending to push communities and families over the edge. There may not be an area in North America that has been more effective in using city zoning policies to aggressively root out payday lenders and their practices that cities in British Columbia where ACORN Canada has made this a signature issue. Meeting with the staff over recent days, one thing is crystal clear: we’re winning!

We’ve discussed the city bylaw or ordinance in the fast growing Vancouver suburb of Surrey in the past. There is a 400 meter restriction on opening a new payday lending storefront based on the distance from other financial institutions or other payday shops or check cashing stores. There also has to be a 400 meter distance between schools. ACORN organizers believe that it will nearly impossible for another outlet to be opened.

And, then there is Burnaby, another Vancouver suburb, where we are organizing, that responded to ACORN’s demands by doing an extensive study over the last more than six months on payday lenders and their value and placement in the community. The Planning Department’s report was a model of comprehensive, straight talk. They didn’t hedge their words. They made it clear that ACORN had asked them to do the study, and they were going to ask ACORN and other groups to help implement the results. I’m not going to lie: I loved that part!

Reading the report, the Planning Department puts one nail after another in the payday lending coffin. They reviewed the Surrey work and the steps taken by other cities in British Columbia. They offered an extensive review of surveys done by various groups including an ACORN/Stratcom survey establishing how small the client base for payday lending was – about 3% of the population – despite its predatory nature, and this 3% became a cornerstone for their recommendations arguing against proliferation of payday lending sites compared to customer base. They didn’t mince words on the relative interest rates allowed by law for payday lending which, despite many hard won ACORN reforms, are still usurious and confiscatory ranging between 500 and 600% if they were applied on an annual basis.

The recommendations almost seemed anticlimactic. Payday lenders and gold exchanges, a close cousin, would require a special zoning classification rather than being seen as “banking.” Existing stores outside of these currently fixed zoning districts would be seen as nonconforming uses, meaning they could neither be duplicated nor could a new store come in if an old one abandoned the site. The writing wasn’t on the wall, it was in the report. It would be next to impossible in Burnaby to open another payday lending outlet in the city, and the ones there now are on borrowed time.

In community organizing this is what we call a big win. Now the task is to duplicate this victory and the good work of the Burnaby Planning Department throughout British Columbia, Ontario, the rest of Canada, and, heck, maybe the world.